Shares in Orsted, the world’s largest offshore wind developer, plunged by almost a third today after the company announced an emergency rights issue for around £7 billion following what it described as “material adverse developments” in the US market.

The dramatic financial intervention raises fresh questions about the viability of the company’s £1.5 billion Mooir Vannin Offshore Wind Farm, which would be the Isle of Man’s first offshore wind project and for which planning permission was submitted to the Island’s government just months ago.

US market problems force emergency funding

Orsted was forced to abandon plans to sell a stake in its troubled Sunrise Wind project off New York after spiralling costs and delays made the asset sale impossible. The company cited “adverse” market conditions that prevented it from raising the capital needed to support its global investment programme.

The Danish state, Orsted’s largest shareholder, is backing the massive rights issue, which will see existing shareholders offered new shares at heavily discounted prices. However, the scale of the emergency funding requirement underscores the severe financial pressures facing even the most established offshore wind developers.

Mooir Vannin project under spotlight

The Mooir Vannin project, located several miles off Maughold Head, represents a significant investment commitment for Orsted at a time when the company is struggling with cost overruns and financing difficulties elsewhere. The 1.4GW wind farm was designed to feature up to 87 turbines, recently scaled back from the original proposal of 100 turbines following public consultation.

Orsted submitted its Marine Infrastructure Consent application in March 2025, with operational dates targeted for 2031-2033. The company has already invested substantially in seabed surveys alone, with further funding committed to environmental studies and planning work over the past few years.

The project’s ambitious scope includes:

  • Generation capacity of 1.4GW – enough to power around 1.4 million homes
  • Connection to both the Isle of Man grid at Douglas and the UK National Grid at Penwortham, Lancashire

Industry-wide financial turbulence

Today’s announcement follows a pattern of financial difficulties across the offshore wind sector. Orsted has already booked large impairment losses this year, primarily related to its American operations, where rising interest rates, regulatory changes, and supply chain issues have significantly impacted project economics.

The company’s problems reflect broader industry challenges. In the US, more than 12 gigawatts of offshore wind projects (representing over half the construction pipeline) have been cancelled or forced to renegotiate contracts due to spiralling costs. Swedish developer Vattenfall estimates that offshore wind construction costs have increased by up to 40% this year.

Supply chain bottlenecks, vessel availability, and rising interest rates have created, according to industry experts, a “perfect storm” for offshore wind development. The US market has been particularly hard hit, with several major developers, including Equinor and BP, seeking to renegotiate power purchase agreements.

Manx implications

For the Isle of Man, Orsted’s financial difficulties raise important questions about project delivery timelines and funding certainty. The Mooir Vannin project forms a cornerstone of the Island’s net-zero strategy.

John Galloway, Orsted’s Development Director for the Isle of Man, recently told the Isle of Man Chamber of Commerce that the project would be “privately funded” and would deliver multiple revenue streams for the Island’s government throughout its operational lifetime. However, today’s developments highlight the challenges facing private funding in the offshore wind sector.

The Isle of Man government granted NSIP (Nationally Significant Infrastructure Project) status to the project’s UK connection infrastructure in October 2024, underscoring its strategic importance. However, the financial viability of such large-scale infrastructure projects increasingly depends on stable, long-term funding arrangements.

Wider sector challenges

The offshore wind industry is grappling with fundamental economic pressures that extend far beyond Orsted. Rising costs for steel, specialist vessels, and skilled labour have coincided with higher financing costs as central banks have raised interest rates to combat inflation.

Projects that seemed economically viable when contracts were signed several years ago are now struggling. The industry estimates that £17 billion in supply chain investment is needed globally to meet installation targets, yet project cancellations are undermining confidence in that investment.

In Germany, recent offshore wind auctions have failed to attract any bidders, highlighting deteriorating market conditions across Europe. The UK has responded by increasing subsidy levels and raising electricity prices for consumers and businesses.

Looking Forward

Orsted insists it remains committed to its global offshore wind portfolio, including projects in development. The company’s CEO, Mads Nipper, said the rights issue would provide “financial strength” to navigate current market challenges while continuing to develop its pipeline.

For the Isle of Man, the key question is whether Orsted’s financial difficulties will affect the Mooir Vannin timeline or project scope. The company has invested heavily in the development phase and has strong incentives to complete the project, particularly given the supportive regulatory environment and the strategic location between UK and Irish markets.

However, today’s dramatic market reaction – with Orsted shares falling to their lowest level since 2020 – demonstrates the financial volatility facing offshore wind developers. Orsted’s financial problems serve as a stark reminder of the financial risks inherent in large-scale offshore wind development.